India's forex reserves drop by $1.80 billion

India's foreign exchange reserves fell by $1.80 billion to $290 billion for the week ended May 18, registering a sharp drop for the third week in a row, largely due to suspected sale of dollar by the central bank to defend rupee, the Reserve Bank of India data showed.

The forex reserves had declined by $1.37 billion and $2.18 billion respectively in the previous two weeks.

Foreign currency assets, the biggest component of the forex reserves kitty, fell by $1.74 billion to $256.11 billion during the week ended May 18, according to the Reserve Bank of India's weekly statistical supplement.

The RBI did not provide any reasons for the change in foreign currency assets.

It said the assets expressed in US dollar terms included the effect of appreciation or depreciation of non-US currencies such as the pound sterling, euro and yen held in reserve.

However, the RBI is understood to have sold dollars from the reserves to curb the slide in the value of rupee.

The Indian rupee slumped to a record low of 56.40 against a dollar this week. The rupee witnessed loss for the eighth consecutive week, the longest loosing streak since 2008 economic crisis.

The value of special drawing rights (SDRs) fell by $35.5 million to $4.39 billion, and India's reserves with the International Monetary Fund (IMF) fell by $23.6 million to $2.86 billion.